North Dakota Postal Service Operations

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SOUTH DAKOTA

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Audit ReportReport Number DR-AR-15-004

North Dakota Postal Service Operations

March 31, 2015

BackgroundNorth Dakota has experienced the nation’s fastest-growing population, growing 7.6 percent since 2010 compared to 2.4 percent nationally. The state’s jobless rate was the lowest in the nation (2.8 percent) in July 2014. This is due to significant employment opportunities resulting from the oil boom in the Bakken Shale formation in western North Dakota. However, beginning in November 2014, a plunge in oil prices has resulted in the elimination of thousands of oil-related jobs and slowed growth trends previously experienced in North Dakota.

The state’s population growth has created a 14 percent increase in U.S. Postal Service delivery points and a 165 percent increase in package deliveries in the last 4 years. During that same time, delivery points nationally increased 1 percent and packages 21 percent. The state has four mail processing sites that sort and distribute mail for 333 post offices. In FY 2014, these four sites processed 678 million mailpieces.

This audit responds to a request from Senator Heidi Heitkamp to review concerns about mail service. Our objective was to assess selected Postal Service operations in North Dakota.

What The OIG FoundThe Postal Service has taken action to improve mail service in North Dakota, such as hiring additional employees, detailing

personnel to supplement the workforce, authorizing overtime, and adding retail units. However, more improvements can be made. Specifically, the Postal Service did not always timely process, deliver, and transport the mail in North Dakota. In addition, it lacked sufficient retail windows to meet demand and some box up-times (the posted time mail is available to the customer at their PO Box), were inaccurate.

These conditions occurred because the Postal Service did not have an established contingency plan to address rapid changes in the population growth and staff turnover. We found that North Dakota’s postal facilities lacked adequate mail processing equipment and processing floor space and sufficient delivery staff and retail operations. In addition, Postal Service mail received from FedEx at the Grand Forks, ND airport did not always allow for the timely transport of mail. Additionally, changes in box up-times were not always adequately communicated.

Due to these operational challenges, the Postal Service in North Dakota rarely met national service standards. Furthermore, delivery staff was overworked, with rural carrier overtime increasing by 241 percent between fiscal years (FY) 2011 and 2014. Additionally, carriers returning from their routes after 5 p.m. ranged from a low of 23 percent to a high of 56 percent between FYs 2012 through 2014. Finally, customers experienced excessive wait times at some retail locations.

HighlightsThe Postal Service did not have

an established contingency plan

to address rapid changes in the

population growth and

staff turnover.

North Dakota Postal Service Operations Report Number DR-AR-15-004 1

What The OIG RecommendedWe recommended the district manager, Dakotas District, install additional mail processing equipment, consolidate Fargo operations, develop a contingency plan to address staffing levels during periods of rapid economic growth or retraction and ensure accurate postings of box up-times. We also recommended the vice president, Network Operations, modify the transportation network.


Transmittal Letter

March 31, 2015

MEMORANDUM FOR: LINDA M. MALONE VICE PRESIDENT, NETWORK OPERATIONS

DARRELL E. STOKE DISTRICT MANAGER, DAKOTAS DISTRICT

FROM: Robert J. Batta Deputy Assistant Inspector General for Mission Operations

SUBJECT: Audit Report – North Dakota Postal Service Operations (Report Number DR-AR-15-004)

This report presents the results of our audit of North Dakota Postal Service Operations (Project Number 14XG030DR000).

We appreciate the cooperation and courtesies provided by your staff. If you have any questions or need additional information, please contact Rita F. Oliver, director, Delivery Operations, or me at 703-248-2100.

Attachment

cc: Corporate Audit and Response Management


Table of Contents

CoverHighlights ......................................................................................................1

Background ................................................................................................1What The OIG Found .................................................................................1What The OIG Recommended ..................................................................2

Transmittal Letter ..........................................................................................3Findings ........................................................................................................5

Introduction ................................................................................................5Conclusion .................................................................................................6Mail Processing ..........................................................................................6Delivery Operations ...................................................................................7Transportation ............................................................................................9Customer Services ...................................................................................11Service .....................................................................................................12Management Actions ...............................................................................15

Recommendations......................................................................................16Management’s Comments .......................................................................16Evaluation of Management’s Comments .................................................17

Appendices .................................................................................................18Appendix A: Additional Information ..........................................................19

Background ...........................................................................................19Operational Analysis ..............................................................................20Objective, Scope, and Methodology ......................................................21Prior Audit Coverage .............................................................................21

Appendix B: Summary List of Constituent Concerns ...............................22Appendix C: Carrier Staffing Analyses .....................................................23Appendix D: Management’s Comments ..................................................27

Contact Information ....................................................................................30


IntroductionThis report presents the results of our audit of North Dakota Postal Service Operations1 (Project Number 14XG030DR000). Our objective was to assess selected U.S. Postal Service operations in North Dakota. The report responds to a request from Senator Heidi Heitkamp to review concerns about mail service. See Appendix A for additional information about this audit.

Propelled by a massive oil boom, North Dakota’s Bakken region2 experienced significant increases in population, mail delivery points,3 rent, wages, and package volume. These changes have stressed North Dakota’s existing Postal Service resources and infrastructure (see Figure 1 for percentage growth examples).

Figure 1. Change in the Bakken Region Between Fiscal Years (FY) 2010 and 2014

1 We reviewed mail processing and transportation operations in Bismarck, Fargo, Grand Forks, and Minot. We observed delivery and retail operations in Bismarck, Devils Lake, Dickinson, Fargo, Grand Forks, Minot, Stanley, and Williston. We also reviewed delivery and retail statistics for select offices in the Bakken region.

2 The Bakken Shale oil patch area of western North Dakota includes deliveries for all 3-Digit ZIP Code areas 585 through 588. This includes offices in Bismarck, Dickinson, Minot, and Williston.

3 A single mailbox or place to which mail is delivered.

Findings

NORTH DAKOTA

BAKKEN REGION

Source: U.S. Postal Service Office of Inspector General (OIG) analysis.

This report has not yet been reviewed for release under FOIA or the Privacy Act. Distribution should be limited to those within the Postal Service with a need to know.North Dakota Postal Service Operations Report Number DR-AR-15-004 5

In January 2014, Senator Heitkamp launched an online initiative (Fix My Mail) to learn about her constituents’ challenges and problems regarding postal services in North Dakota. Based on the responses, the senator identified five areas of concern: new employee training, employee-management communication, working conditions, staffing, and service standards. See Appendix B for a summary of concerns resulting from the congressional initiative.

ConclusionThe Postal Service has taken action to improve mail service in North Dakota, such as hiring additional employees, detailing personnel to supplement the workforce, authorizing overtime, and adding retail units. However, more improvements can be made. Specifically, the Postal Service did not always timely process, deliver, and transport the mail in North Dakota. In addition, it lacked sufficient retail windows to meet demand and some box up-times — the posted time mail is available to the customer at their Post Office (PO) Box — were inaccurate.

These conditions occurred because the Postal Service did not have an established contingency plan to address rapid changes in the population growth and staff turnover. We found that North Dakota’s postal facilities lacked adequate mail processing equipment and processing floor space, and sufficient delivery staff and retail operations. In addition, Postal Service mail received from FedEx at the Grand Forks, ND, airport did not always allow for the timely transport of mail. Additionally changes in box up-times were not always adequately communicated.

Due to these operational challenges, the Postal Service in North Dakota rarely met service standards. Furthermore, delivery staff was overworked, with rural carrier overtime increasing by 241 percent between FY 2011 and FY 2014. Additionally, carriers returning from their routes after 5 p.m. ranged from a low of 23 percent to a high of 56 percent between FYs 2012 and 2014. Finally, customers experienced excessive wait times at some retail locations.

Mail ProcessingOf the four processing sites in North Dakota, the two largest — the Fargo and Bismarck Processing and Distribution Centers (P&DC)4 — did not always process mail timely, although improvements have been made. Delays in mail processing were caused primarily by inadequate mail processing equipment at both P&DCs and lack of floor space at the Fargo P&DC. The processing sites in North Dakota have limited automated processing and none have automated package sorting equipment.

The Postal Service significantly reduced the percentage of total volume that was delayed at the Fargo and Bismarck P&DCs in FY 2014. The Fargo P&DC reduced its delayed mail in FY 2014 to 3 percent, compared to 10 percent in FY 2013. The Bismarck P&DC had a steady improvement and was below the national average in FY 2014 (see Table 1).

4 Delayed mail data was not available for Minot and Grand Forks.

The Postal Service has taken

action to improve mail service

in North Dakota; however, more

improvements can be made.


Table 1. Delayed Mail5 Comparison

Fargo BismarckFY 2012 FY 2013 FY 2014 FY 2012 FY 2013 FY 2014

Delayed Mail 20,082,634 38,197,334 10,875,654 8,561,879 4,250,798 1,196,291

FHP Volume 377,071,593 378,291,092 356,648,598 128,214,013 133,063,284 127,777,845

Percent Delayed to FHP 5% 10% 3% 7% 3% 1%

National Percent Delayed 0.3% 1.0% 1.4% 0.3% 1.0% 1.4%

Source: Enterprise Data Warehouse (EDW) Mail Condition Reporting System (MCRS).

Mail processing sites must report delayed mail according to Postal Service guidelines.6 While delays at the processing site can hinder timely delivery, not all mail reported as delayed during processing results in delayed mail delivery.

We also found floor space constraints at the Fargo P&DC, which uses two locations to process the mail, requiring the shuttling of mail between the two sites. Furthermore, operations at the Fargo P&DC are crowded and delivery point sequencing7 mail for surrounding offices has to be processed in the basement and transported by elevator to the loading docks before being dispatched for delivery.

Both of the Fargo processing sites have leases that expire in February 2015. The expiration of these leases provides the opportunity for the Postal Service to consolidate mail processing operations in Fargo that are 6 miles apart. Western Area officials are actively searching for a replacement annex in Fargo to accommodate all flat mail operations from the Fargo P&DC. District officials stated that their goal is to improve efficiency by consolidating all Fargo processing operations into one building and optimizing resources.

Delivery OperationsThe Postal Service could not always timely deliver its mail volume because of insufficient staffing. This occurred because the Postal Service did not have an established contingency plan to address rapid changes in the population growth and staff turnover.

Between FY 2011 and FY 2014, delivery points in the Bakken region increased by 14 percent (about 21,000 deliveries) as opposed to the national increase of just 1 percent. Total package deliveries increased by 165 percent (2,348,350 mailpieces) in this region, while package growth nationally averaged 21 percent (see Table 5).

5 Includes mail reported in the “Delayed Processing” and “Standard Mail Delayed Mail Flow” categories.6 The web Mail Condition Reporting System requires that all delayed volume categories be counted. Failure to report all required volumes constitutes falsification of official

records.7 The arrangement of mail into delivery order using the delivery point code and other data elements.


Adding to the delivery challenges, the Postal Service had difficulty hiring and retaining employees. In April 2014, the Postal Service had 54 rural carrier and 15 city carrier vacancies at the units we visited. We reviewed carrier retention from October 2011 to September 2014 at the Williston, Dickinson, and Minot post offices, where management hired 77 carriers and transitional employees.8 As of August 2014, only 35 of the 77 carriers (45 percent) continued to work for the Postal Service.9 Management stated that all new carriers receive standardized training to perform their duties. Difficulty in hiring and retaining employees resulted in insufficient staffing at all of the post offices we visited. See Appendix C for city and rural carrier staffing analyses.

Moreover, limited benefits, challenging working conditions (such as volatile weather, physical labor, and strenuous workhours), and higher competing wages resulted in low retention rates for carriers. Employers in the energy field and retail and food services offer higher pay, incentives, and housing stipends. Employers in the retail and food services offer comparable pay for entry level positions without the challenging working conditions. Pay rates at the Postal Service start at $16.92 per hour for a city carrier, compared to $16.00 and $17.40 an hour for entry-level positions in food and retail services. According to Postal Service management, employee wage and benefit packages, which are established through union negotiations, are not always competitive with other employers in the area.

In FY 2014, rural carrier overtime increased by 241 percent from FY 2011, significantly exceeding the national 105 percent increase. High use of overtime indicates many carriers are being overworked. Senator Heitkamp’s office received complaints from employees working 12-hour shifts with no days off. In addition to using overtime to address the carrier shortages, management began detailing10 employees into the region. In FY 2014, there were 99 detail assignments to fill vacant carrier positions in the Bakken region. As a result of these carrier shortages, mail is not always being delivered timely and carriers are returning to their units after 5 p.m.

Carriers returning from their routes after 5 p.m. ranged from a low of 23 percent to a high of 56 percent between FYs 2012 and 2014 (see Figure 2).

8 Non-career bargaining unit employees used in accordance with the terms of their respective collective bargaining agreements. The Postal Service phased out this employee category in April 2013.

9 Thirty-six (47 percent) resigned and six (8 percent) were terminated.10 A detail is a temporary assignment to perform duties other than those in an employee’s official job description. Detailed employees performed in a unit other than their

permanent unit.


Figure 2. Carriers Returning After 5 P.M. in the Bakken Region

Source: EDW.

TransportationTransportation operations did not provide timely delivery of mail to selected areas of the state. Specifically, mail tendered at the Grand Forks airport undergoes additional handlings, exposure to the elements, and extended transportation times before it arrives in Bismarck and Fargo.

Transportation operations had delays throughout the state in First-Class Mail® (FCM) and Priority Mail® services. Current FCM and Priority Mail transportation depends on timely arrival of the contracted FedEx service and associated Terminal Handling Service (THS)11 and alternate method of transportation (AMOT) suppliers. Under the existing process, FedEx12 tenders destinating mail13 for the Postal Service to the THS provider at the Grand Forks airport. The mail is then separated and routed to the Bismarck and Fargo sites, which are over 1 hour away.

11 According to the Postal Service, THS providers prepare mail for air transportation. After accepting mail from the Postal Service, THS providers containerize it and provide ancillary services, and then tender it to aviation suppliers to be transported.

12 The Postal Service partners with FedEx to fly some mail via the Fed Ex air transportation network.13 Mail arriving for its point of final delivery (destination) through a processing facility.


Bismarck

■ Mail routed to the Bismarck P&DC is flown from the Grand Forks THS via two AMOT planes (see Figure 3).

Figure 3. AMOT Planes Destined for Bismarck

Source: OIG photograph taken June 13, 2014.

■ Any overflow mail that does not fit on the AMOT planes is transported by truck through Fargo and then to the Bismarck P&DC.

■ Mail destined for the Minot and Williston areas is sorted at the Bismarck P&DC and transported by truck to Minot for processing and dispatch.

Fargo

Mail routed to the Fargo P&DC is transported by truck to the Fargo Annex for processing or cross-docked14 to the Fargo P&DC.

The Postal Service could transport more mail via truck and save time and costs if it modified its existing transportation The Postal Service estimates it could save about million (over 10 years)

by having .

14 A dock transfer entails transporting mail that will not be processed at the facility directly between vehicles.


Customer ServicesNorth Dakota did not have enough retail windows to meet the increased demand for services caused by population growth and some box up-times15 were inaccurately posted.

Based on our observations, wait time in line (WTIL) exceeded the established 5-minute goal at three of the nine units we visited16 even though all retail counters were fully staffed. The Fargo Prairiewood Station had the most instances of excessive wait times.

We also observed incorrect box up-times at two of the nine offices we visited. For example, the Stanley PO had 11 a.m. posted in the lobby, when 12:30 p.m. was the correct time. Posted signs at the Fargo Prairiewood Station showed 11 a.m. as the box up-time, but the actual time was 12 p.m. (see Figure 4).

Figure 4. Fargo Prairiewood Station Sign

Source: OIG photograph taken July 8, 2014.

Additionally, the Williston Main PO and Badlands Station did not have any box up-time signs posted in the lobby. Late box up-times was one of the concerns Senator Heitkamp’s initiative identified. Failure to accurately post box up-times or changing box up-times causes customer dissatisfaction. One customer interviewed during our site visits stated that box up-times had become so late they were considering closing their PO Box, since they received free mail delivery at roughly the same time the mail was being deposited to their paid PO Box.

Each PO Box unit has a scheduled box up-time for mail to be finalized and available to customers. The time is based on variables such as mail arrival time, average mail volume per trip, and staffing availability. The box up-times are required to be posted in the retail lobby as notification for customers and in the box distribution area as notification for employees working the mail.17

15 Retail Standardization requirements state that “PO Box mail pick-up times and PO Box rates must be listed correctly using Postal-approved signage.”16 “Service in 5 Minutes or Less” is an initiative to provide a level of service that keeps customer wait time to a minimum while providing quality customer service.17 Postal Operations Manual, Issue 9, Section, 141.423, PO Box Service Up-Time.


The box up-time issue occurred because of inadequate management oversight and frequently changing times (see Table 4). According to management, they did not ensure accurate box up-time postings because they had other, higher priorities. Long wait times for services and inaccurate signage can directly influence customer satisfaction, impacting customers’ willingness to revisit the post office and possibly leading to loss of revenue.

ServiceMail service in North Dakota did not consistently meet national service performance targets, as was the case nationwide. There is no single root cause for the decline in mail service, but a multitude of issues, such as the state’s increasing consumer demand, inadequate processing operations, transportation delays, insufficient staffing, hiring, training and replacement (due to turnover) of new/substitute employees, and adverse weather conditions.18 To confirm service performance, we reviewed External First-Class (EXFC) and Priority Mail performance results.

Our analysis of customer service performance, as measured by the EXFC measurement system,19 showed that Bismarck was the only site to meet the Overnight target in FY 2014. None of the four North Dakota sites met the 2-Day or 3-Day target in FY 2014 (see Table 2).

18 North Dakota suffers extreme temperatures and unpredictable weather patterns. The variation between North Dakota’s highest and lowest temperature is the third largest variation of any U.S. state. Weather variability also affects year-to-year comparisons.

19 Test an independent contractor performs to measure service performance for First-Class Mail (letters, flats, and postcards) from mail collection to final delivery.


Table 2. EXFC Performance Scores FYs 2012 Through 2014

Standard Site FY 2012 FY 2013 FY 201419

Overnight

Bismarck 96.29 97.72 97.15

Fargo 97.26 95.66 96.37

Grand Forks 95.60 97.04 96.12

Minot 93.16 91.93 90.43

National 96.60 96.27 96.08

Target 96.65 96.70 96.80

2-Day

Bismarck 93.22 92.56 93.12

Fargo 95.81 94.32 94.54

Grand Forks 94.82 94.24 94.75

Minot 92.55 90.34 90.44

National 94.97 95.34 94.99

Target 94.15 95.10 96.50

3-Day

Bismarck 88.42 84.35 84.54

Fargo 91.10 88.34 83.71

Grand Forks 88.56 89.87 85.88

Minot 86.33 87.03 77.09

National 92.34 91.65 87.77

Target 92.85 95.00 95.25Source: EDW and Postal Service blue pages.

Our analysis of Priority Mail performance scores revealed that, of the four North Dakota sites, only Bismarck exceeded targets for 3-Day Surface in FY 2014 and 3-Day Air in FY 2013 (see Table 3).

20 Green numbers indicate quarters in which the site met or exceeded the national target and red numbers indicate quarters where targets were not met.North Dakota Postal Service Operations Report Number DR-AR-15-004 13

Table 3. Priority Mail Performance Scores FYs 2013 and 2014

Standard Plant FY 2013 FY 2014 Standard Plant FY 2013 FY 201420

1-Day Surface

Bismarck

2-Day AIR

Bismarck

Fargo Fargo

Grand Forks Grand Forks

Minot Minot

National 90.21 88.95 National 90.32 84.61

Target 96.15 Target 93.20

2-Day Surface

Bismarck

3-Day AIR

Bismarck

Fargo Fargo

Grand Forks Grand Forks

Minot Minot

National 94.02 90.89 National 96.87 86.77

Target 96.15 Target 93.20

3-Day Surface

Bismarck

Fargo

Grand Forks

Minot

National 94.74 95.56

Target 96.15Source: EDW and the Postal Service.

21 Green numbers indicate quarters in which the site met or exceeded the national target and red numbers indicate quarters where targets were not met.


Management ActionsPopulation growth resulting from the oil boom in the Bakken region has been a major challenge for the entire state of North Dakota. The Postal Service and other state, federal, and private entities have struggled to meet demands fueled by growth in this region. We recognize the efforts of Postal Service management to address these challenges and improve conditions in North Dakota. Examples of management actions taken are:

■ Visiting communities to see the issues first hand.

■ Using overtime to address staffing shortages.

■ Adding 40 additional rural routes since 2011.

■ Detailing employees from outside the region.

■ Establishing hiring coordinators and adding a recruiter.

■ Hiring additional employees, including permanent career staff.

■ Adding a retail unit (Badlands) in Williston and additional retail outlets in the state.

■ Installing Self-Service Kiosks 22 and Mobile Point-of-Sale devices.

■ Adding PO Boxes and parcel lockers to improve WTIL and customer access.

■ Modifying wages from the National Rural Letter Carriers’ Association agreement to compete with the local wage market.

■ Meeting with employees, congressional staff, and Customer Advisory Councils.

■ Installing automated processing equipment at the Bismarck P&DC.

■ Allocating automated mail processing equipment for Fargo.

■ Negotiating transportation and space modifications.

■ Revising public websites to improve customers’ experience locating and understanding service standards and performance results.

■ Reassessing space and future needs for all facilities in the Bakken region.

We are basing our recommendations on the population growth and related trends that occurred in North Dakota between FY 2011 and FY 2014.

22 Self-Service Kiosks allow customers to access retail Postal Services such as purchasing books of first-class stamps or mailing packages through a machine similar to an automated teller machine.


We recommend the district manager, Dakotas District:

1. Install additional mail processing equipment at the Bismarck and Fargo Processing and Distribution Centers.

2. Consolidate all Fargo Processing and Distribution Center mail processing operations in one location, as space allows.

3. Develop a contingency plan to address staffing levels during periods of rapid economic growth or retraction.

4. Ensure Post Office Box Service up-times are accurately posted throughout the district.

We also recommend the vice president, Network Operations:

5. Modify the transportation network

Management’s CommentsManagement agreed with our findings and recommendations.

In response to recommendation 1, district officials agreed with the need for additional mail processing equipment at the two facilities in Fargo and Bismarck. In September 2014, they installed two additional pieces of mail processing equipment in the Bismarck P&DC and plan to install an additional piece of mail processing equipment in the Fargo P&DC. The target implementation date is June 2016.

In response to recommendation 2, district officials agreed with the need for additional processing space in the Fargo P&DC. They have initiated a study to find a new facility in Fargo to allow all processing operations to be housed under one roof. The target implementation date is June 2016.

In response to recommendation 3, district officials agreed to develop a contingency plan to address staffing levels. Officials stated that canvassing and hiring in all areas of the district is a priority for both the human resources department and for the newly hired recruiter. This effort is currently in place and will be ongoing.

In response to recommendation 4, district officials agreed that Post Office Box Service up-times were not accurate. The recent PostPlan and transportation changes did not allow facilities to keep up with the changing Post Office Box Service up-times, and they have taken action to correct the errors. The target implementation date is March 31, 2015.

In response to recommendation 5, the vice president, Network Operations agreed to modify the transportation network. The target implementation date is September 2015.

See Appendix D for management’s comments, in their entirety.

Recommendations

We recommend management

install additional mail processing

equipment, consolidate

Fargo operations, develop a

contingency plan to address

staffing levels during periods of

economic growth or retraction

and ensure accurate postings of

box up-times.

We also recommend

management modify the

transportation network.


Evaluation of Management’s CommentsThe OIG considers management’s comments responsive to the recommendations and corrective actions should resolve the issues identified in the report.

The OIG considers recommendations 1 and 3 significant, and therefore requires OIG concurrence before closure. Consequently, the OIG requests written confirmation when corrective actions are completed. These recommendations should not be closed in the Postal Service’s follow-up tracking system until the OIG provides written confirmation that the recommendations can be closed.


Appendices

Appendix A: Additional Information ..........................................................19Background ...........................................................................................19Operational Analysis ..............................................................................20Objective, Scope, and Methodology ......................................................21Prior Audit Coverage .............................................................................21

Appendix B: Summary List of Constituent Concerns ...............................22Appendix C: Carrier Staffing Analyses .....................................................23Appendix D: Management’s Comments ..................................................27


Click on the appendix title

to the right to navigate to

the section content.

BackgroundNorth Dakota has become one of the few places in the world that produces more than a million barrels of oil per day, due to the rich Bakken Shale formation beneath the western part of the state (see Figure 5). The U.S. Census Bureau estimates the population of North Dakota has increased by 7.6 percent since the 2010 Census, with some counties in the Bakken region experiencing 20 percent or greater population growth.

This population growth has been a major challenge for the entire state. The Postal Service, along with police departments, health care services, schools, roads, and other public services, has struggled to keep up with the increasing demand for services in the Bakken region. The Postal Service in North Dakota has four mail processing sites that sort and distribute mail for 333 post offices.

Figure 5. North Dakota Population Growth and Postal Processing Sites

Source: U.S. Census Bureau.

The growth trends in North Dakota and cities building entire economies around the oil industry have slowed dramatically. The price of crude oil started declining in November 2014, when it dropped below $80 per barrel. As of February 20, 2015, the price is down to $50 per barrel. The drop in crude oil prices has eliminated thousands of oil-related jobs as firms respond to the plunge in oil prices. The number of rigs drilling new oil wells in North Dakota dropped from 187 this time last year to 161 in January 2015 – the lowest level in 5 years, with predictions of reducing that to 50 rigs by June 2015.

Appendix A: Additional Information


In January 2014, Senator Heitkamp launched an online initiative (Fix My Mail) to learn about the challenges and problems of her constituents regarding postal services in North Dakota. The senator asked the OIG to review issues the initiative identified to improve service. Senator Heitkamp also asked the Postal Service and the Government Accountability Office to review the same issues.

To address the senator’s concerns, we reviewed mail processing and transportation operations in Bismarck, Fargo, Grand Forks, and Minot. We observed delivery and retail operations at Bismarck, Devils Lake, Dickinson, Fargo, Grand Forks, Minot, Stanley, and Williston. We also reviewed delivery and retail statistics for select offices across the state as shown in the operational analyses in Tables 4 and 5.

Operational Analysis

Each PO Box unit has a scheduled box up-time for mail to be finalized and available to customers. Box up-times are required to be posted in the retail lobby to inform customers of the time their mail is available in their PO Box for pick-up. See Table 4 for box up-times for nine units in the Bakken region between FYs 2010 and 2014.

Table 4. Box Up-Time Changes23

Facility Name Zip Code 2010 2011 2012 2013 2014FARGO PRAIRIEWOOD STATION 58103 8:30 AM 10:30 AM 10:30 AM 11:00 AM 12:00 PM

GRAND FORKS PO 58201 9:00 AM 9:00 AM 9:00 AM 9:00 AM 9:00 AM

DEVILS LAKE PO 58301 9:15 AM 9:15 AM 9:15 AM 9:45 AM 9:45 AM

BISMARCK PO 58501 8:30 AM 9:00 AM 9:00 AM 9:00 AM 9:00 AM

DICKINSON PO 58601 10:30 AM 11:45 AM 11:45 AM 11:45 AM 11:45 AM

MINOT PO 58701 9:30 AM 10:30 AM 10:30 AM 10:30 AM 12:00 PM

STANLEY PO 58784 11:30 AM 11:30 AM 11:30 AM 12:30 PM 12:30 PM

WILLISTON PO 58801 12:00 PM 12:00 PM 12:00 PM 12:00 PM 12:00 PM

WATFORD CITY PO 58854 1:00 PM 1:30 PM 1:30 PM 1:30 PM 1:30 PMSource: Postal Service.

23 Yellow highlighted numbers reflect times changed for PO Box Service from the previous year.


Table 5. Bakken Region Delivery Points and Packages Delivered

Delivery Type FY 2011 FY 2012 FY 2013 FY 2014

FY 2011 to FY 2014

Percentage Change

FY 2011 to FY 2014 National

Percentage Change

City Delivery 56,590 57,930 58,448 59,454 5% 1%

Rural Delivery 42,311 45,877 49,009 53,860 27% 4%

PO Box 35,288 38,233 38,592 38,860 10% -9%

Highway Contract Route 14,621 15,462 16,165 17,492 20% 5%

Total Delivery Points 148,810 157,502 162,214 169,666 14% 1%Total Packages Delivered 1,427,254 2,440,423 2,740,231 3,775,604 165% 21% Source: eFlash.

Objective, Scope, and MethodologyOur objective was to assess selected Postal Service operations in North Dakota. To accomplish our objective, we observed mail processing, transportation, delivery, and retail operations at select locations and interviewed Postal Service officials. We also analyzed key operational impacts to service, such as increases in population, delivery points, overtime, and package volumes; declines in delayed mail; and employee complement. Additionally, we discussed constituent concerns with congressional staff.

We relied on data obtained from Postal Service blue pages and operational systems, including the EDW, eFlash, MCRS, and Variance programs. We assessed the reliability of data by confirming our results with management and determined that the data were sufficiently reliable for the purposes of this report.

We conducted this performance audit from May 2014 through March 2015, in accordance with generally accepted government auditing standards and included such tests of internal controls as we considered necessary under the circumstances. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objective. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objective. We discussed our observations and conclusions with management on February 2, 2015, and included their comments where appropriate.

Prior Audit CoverageThe OIG did not identify any prior audits or reviews related to the objective of this audit.


SERVICE WORKING CONDITIONS

Retail Services: 1. Untenable work1. Lobbies in disarray 2. Constant physical strain2. Long wait times in line 3. Mandatory overtime3. Insufficient mail acceptance options 4. Consistent 12-hour workdays4. Late PO Box Service times 5. No flexibility in schedules5. Unaccommodating window hours 6. Breaks not taken to get work done6. Retail units closed contrary to posted hours 7. Not paid for work performed7. Altering business hours 8. Delivering mail after dark8. Inadequate staffing 9. Delivering mail on hazardous roads9. Out of postal supplies 10. Poor employee morale10. Unprofessional employees, unfriendly atmosphere 11. Uncomfortable reporting harassment

Delivery Services: 12. Crossing crafts against union agreements11. Misdelivered mail 13. Frustration over details’ extra benefits12. Erratic mail delivery 14. Hostile work environment13. No mail deliveries for days at a time 15. Unsupported work-life balance14. Damaged mail stuffed in mailboxes 16. Autocratic leadership15. Mail left in unsecured areas 17. Micro-management16. Carriers not attempting deliveries at the door 18. Lack of management accountability17. Carriers not picking up outgoing mail from mailboxes 19. Reactive approach to improve conditions18. Unpredictable third-party rural deliveries STAFFING

19. Outgoing collection mail misses dispatch 1. Insufficient staffing20. Large volumes of curtailed mail at units 2. Ineffective hiring strategies21. Insufficient cluster box units and parcel lockers 3. Non-competitive wages

Applicable to Retail and Delivery Services or Other: 4. High turnover rate22. Mail delays 5. Temporary hires, instead of career23. Hold mail and forwarding requests not followed 6. Detailing instead of promoting from within24. Mail returned for no reason 7. Management inconsistencies25. Address management not up to date 8. Applicant testing difficulties & waived tests26. Collection boxes removed COMMUNICATION

27. Inaccurate online tracking 1. Ineffective employee feedback process28. Complaints get no response/action 2. Poor employee-management communication29. Telephone calls are ignored 3. No protection from retribution30. Work flow and data manipulation TRAINING

31. Distrust with Postal Service brand 1. Inadequate training of new employees32. Service standard downgrades 2. Unstructured training program33. Consolidations negatively impacting service 3. New employee frustration34. Late mail arrival at the processing plants 35. Mail processed on antiquated sorting machines

Appendix B: Summary List of Constituent Concerns


We performed city and rural carrier staff analysis by comparing the number of earned positions to the number of paid carriers. Earned city carrier positions refers to the number of employees allocated to a facility based on workhours, productivity, workload, routes, and delivery analysis using standardized productivity targets and performance trends. Paid city and rural carriers are the number of actual carriers in the EDW’s On Rolls and Paid Employees Statistics report. City and rural carrier staffing analyses are presented in the following graphs.

Figure 6. Dickinson PO – City Carriers

Source: EDW and City Delivery Variance.

Appendix C: Carrier Staffing Analyses


Figure 7. Williston PO – City Carriers

Source: EDW and City Delivery Variance.

Earned rural carrier positions were calculated as two positions for each rural route – one regular carrier and one carrier assistant or replacement; however, due to hiring difficulties in North Dakota, the district implemented an alternative replacement carrier staffing formula24 that allows replacement carriers to be assigned to more than one regular route by staggering regular carrier routes on non-scheduled days.

24 The formula is described in detail in Handbook El-902-A, Agreement between the USPS and the National Rural Letter Carriers’ Association, Section 2.C.5.b. The formula is not intended to be a permanent staffing alternative and should be phased out as management continues to hire the staff needed to return all regular rural routes to their Saturday relief day.


Figure 8. Dickinson PO – Rural Carriers

Source: EDW and eFlash.

Figure 9. Williston PO – Rural Carriers



Figure 10. Minot PO – Rural Carriers


Figure 11. Stanley PO – Rural Carriers



Appendix D: Management’s Comments


Contact Information


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North Dakota Postal Service Operations

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Transcript of North Dakota Postal Service Operations